Observation Deck – Limitations

No one likes to be reminded of their limitations. And yet, in healthcare circles, the topic keeps rearing its ugly head. Have we reached the limits of healthcare spending? Is it OK that such spending now consumes 16 to 17 percent of our gross domestic product? Can we afford to care for the additional 32 million people who are expected to have insurance coverage as a result of last year’s healthcare reform act? Will we be able to take care of them in 10 years? Twenty years?
The American College of Physicians tackles these delicate questions in its January 2011 position paper, “How can our nation conserve and distribute health care resources effectively and efficiently?” (See this month’s Executive Interview.)

“Every country places limits on access to health care and makes decisions on how to allocate available health care resources—that is, they make decisions that some would describe as ‘rationing’ of care,” points out the ACP. But in the United States, at any rate, those decisions are often made in an irrational and uncoordinated fashion.

“We limit access to care primarily by the price of services, health insurance status, eligibility requirements, and the supply of doctors and other health care professionals and facilities, but these mechanisms are uncoordinated and have led to increased disparities in the quality of and access to care,” says ACP. For example, in 2007, 37 percent of U.S. adults reported that they did not obtain needed medical care for a doctor’s visit; skipped needed medical tests, treatments, or follow-ups; or did not fill prescriptions or skipped doses because of cost.

The ACP suggests that as a nation, we strive to base our decisions on medical evidence. “[S]pending more on care is not necessarily ‘better,’ if much of what one gets is unnecessary or even dangerous, especially if it keeps someone else from beneficial care,” says the ACP in its position paper. That’s why it’s important to develop data on clinical and cost-effectiveness of medical interventions.

And that’s where contracting executives can play a role. Increasingly, you will be called on to ensure that the products, equipment and services you bring into your facilities and IDNs are proven to be effective, from a clinical and cost perspective. That will mean analyzing performance data from vendors, and utilization/outcomes data from your own organizations. Naturally, you won’t do that in isolation. You’ll do it in concert with clinicians, vendors and, increasingly, with analysts on your staff who are comfortable working with numbers.

It’s not just a numbers game of course. You must still be adept at forming good working relationships with administration and the clinical team. But they too will be more tuned in to the power of data than ever before.

About the Author

Mark Thill
Mark Thill is the Editor of The Journal of Healthcare Contracting and has been reporting on healthcare supply chain issues since 1985. He is a graduate of Dominican University in River Forest, Ill., and he received a master's degree in journalism from Northwestern University in Evanston, Ill.