Paul Roemer, who had a contribution on the ICMCC blog on April 30, which was viewed more than 600 times, produced another great article on his blog, this time about the business model of hospitals:
The large provider business model is dying. Play along with me for a minute. How many different services and procedures are offered by the “average” hospital? A couple thousand. Some are performed hundreds of times each day, some on a somewhat regular basis, and some rarely. Let’s focus on those done rarely.The funny thing about having the ability to do something is you have to pay for the resources and technology whether you do it once or hundreds of times. The less you do it, the larger the negative ROI. Most large providers offer many services with negative ROIs. How does one alter the business model to compensate for that? Charge for parking; charge $7 for each Tylenol, outsource less profitable services.It might be important to recognize that the reason many services—the ones most patients need—are marginally profitable is because those services are helping to fund the unprofitable services.
Why hospitals are like airlines and movie theaters, Paul Roemer.
True, absolutely. The resources he mentioned for all those different services (”A couple thousand”) are above all the necessary, often very specialized staff, 24/7.
But he is missing one very important point, in my view. Rarely performed services suffer from lack of routine. The more often a procedure is performed, the bigger the guarantee it is done right. So not only does it cost irresponsibly much to maintain at every hospital the ability to perform all those procedures, it is also hazardous for the patient.
I shortly spoke about a new hospital structure at one of our ICMCC conferences a couple of years ago. Some time earlier I had a long conversation about the concept with an adviser to the NHS. Unfortunately, a couple of months later I found myself in the hospital for treatment of a rare cancer and for a long time I did not have time or energy to pursue the subject further.
But I would like to share with you my view, which has not changed since.
During that conference speech I said the following:
I foresee a completely different health system, more than ever focusing on the central and decisive role of the patient. A medical generalist probably together with pharmacists will function as advisors. They will be the central information point, the spin in the patient’s web, doing the basic error checks and providing consumers with access to information.
Hospitals will split into two groups; there will be specialized clinics, probably run by industry. To exaggerate maybe a little bit, I see a Siemens clinic for cardio-vascular problems, and maybe also a Philips one. These clinics are fully specialized in these specific treatments. After-care and monitoring can be done in large “nursing” hospitals. They will be in touch via video and other tele-applications with the specialized clinic. These specialized clinics can be regional and will be competitive. The patient, in close contact with his insurer and his medical advisors can chose in which clinic he wants to be treated.
ICMCC Conference, 2 June 2005, The Hague, The Netherlands, Lodewijk Bos
Those specialized clinics should be regional, the care facilities should be local.
When I mentioned this idea to the NHS adviser it was received sceptically. Having specialized clinics for certain diseases/treatments made sense, the routine aspect I mentioned earlier being the main argument. But the follow up, the after care in a different location, brought up questions. Let’s look at the advantages. You can build these facilities in a much more friendly style (hotel room like, if you wish, it is cheaper than the average hospital room and far more comfortable for the patient). It will also be localized in the direct neighborhood of the patient’s relatives.
The main question was “what happens when there is an issue/emergency with the patient?” These care clinics do not have the staff available to properly deal with it. My answer was, that is why we created healthcare technology, telemedicine. Every patient has a screen at his bed, directly linked to the clinic where he received his treatment. His EHR will be accessible at both facilities and videoconferencing can take place between the care institute and the specialized clinic. They can advise on proper care in the new situation and if necessary can have the patient transported via helicopter back to the “cure” clinic. That remark was followed by a gasp and the reaction “what about the costs?“. My answer was that the helicopter would be much cheaper than the staffing and the equipment that is on standby in the actual situation.
Of course there will be academic/research hospitals on the top of this pyramid and I can imagine their specialists partly work in cure clinics. The whole concept came to me during a conversation with a daughter of a surgeon who told me her father would much prefer to do surgery as much as possible. Surgeons, medical specialists are craftsmen, highly trained, extremely skillful and with immense responsibilities. And the more they practice the better they get at it.
This means that we have to rethink the whole concept of how we structure cure and care. It will bring considerable cost savings, will make work far more efficient and will have a very positive effect on the patient, as he will receive cure that has guaranteed quality and care in an environment that will be of big advantage to his/her healing process.
A piece by Randy Murray (iPad Causes Flashback – My Early Days In Tech And Medical Information Systems) left me wondering once more why these concepts, apparently already 25 years old, are still not, or at least hardly, implemented?
It will be a major paradigm shift and only one of the many that we will have to work on.