October 25, 2012

Fixing a Broken System — The Institute of Medicine’s Groundbreaking Report on Runaway Waste in American Healthcare

By Gordon Schnell  

There is a lot of chatter these days about trillion dollar deficits and multi-point plans to get the economy back in shape.  President Obama and Governor Romney stick to their respective talking points about their opponent’s critical failings and how they will do things better.  The divisions that separate these candidates and their followers, and the country as a whole, have not been this striking in a very long time.  And lying at the epicenter of this marked political schism is the two sides’ opposing views on healthcare.  The Affordable Care Act is to many the President’s crowning achievement during his four years in office.  It is also what Governor Romney has vowed to tear down on his very first day in office, if given the chance. 

But one thing on which both candidates agree, as does most everyone in both red and blue states alike, is that this country’s healthcare system is broken.  Very broken.  And if fixes are not made soon, we’re all heading for a lot of trouble.  Well, in a perfectly timed delivery, the Institute of Medicine (IOM) recently released its much anticipated report on the faltering state of healthcare in this country.  The IOM was established more than forty years ago by the National Academy of Sciences to advise the federal government on issues of medical care, research and education.  The report — titled Best Care at Lower Cost: the Path to Continuously Learning Health Care in America — was prepared by a nonpartisan who’s who listing of physicians, policy experts and business leaders. 

Even from the standpoint of those who expected a fairly frightful accounting of where we are today, the IOM’s findings were shocking.  The report found that $750 billion (that’s billions!) is wasted every year on unnecessary services, excessive administrative costs, and outright fraud among other problems.  That’s enough to cover the full cost of insurance for more than 150 million workers.  Worse than that, the inefficiencies in the system that are engendering these massive losses are causing people harm.  Lots of people.  Lots of harm.  Even death, as one heavily cited statistic from the report highlights (noting that 75,000 deaths might have been averted in 2005 if every state delivered care at the quality level of the best performing state). 

To provide some color and context on the appalling state of U.S. healthcare, the report described how the failings of the system would look if found in other U.S. industries.  

  • If shopping were like healthcare, product prices would not be posted and the price charged would vary widely for the same product within the same store.
  • If airline travel were like healthcare, pilots would be free to design their own preflight safety checks, or not perform them at all.
  • If home construction were like healthcare, carpenters, electricians and plumbers would work with different blueprints and without coordination.
  • If banking were like healthcare, ATM transactions would take days or longer because of unavailable or misplaced records.
  • If automobile manufacturing were like healthcare, there would be no warranties for manufacturer defects and few factories would monitor and seek to improve quality.

The report concluded that incremental upgrades and changes by individual hospitals and providers are not going to fix the system.  It is going to require a complete and coordinated overhaul; an across-the-board, all-hands-in revamping of how healthcare is delivered, communicated and improved upon. 

According to the IOM study, we have everything we need to get us there.  We have huge advances in science and information technology.  We have clinical capabilities that were not even dreamed of a generation ago.  And we have a more empowered patient population more capable and willing to play an active role in their medical care.  The problem is that the system’s ever-increasing complexity and ever-escalating costs have interfered with any ability to take advantage of these developments.  It has instead led to a downward spiral of chaos, confusion and a widely disjointed approach to delivering healthcare in this country.  The left hand has no idea of what the right hand is doing.

That is where the IOM report comes in.  It offers a clear path on how to get the quality and efficiency of our healthcare to catch up with the medical and technological advances that have become increasingly available.  And it pretty much starts and ends with greater transparency, coordination and cooperation among all constituents in the system — the government, the healthcare providers, the insurance companies, the patients.  It is all about having a “continuously learning” system, where everyone works together to share information, adjust to new discoveries, learn from mistakes, and provide real incentives for choosing the most cost-effective solutions.

The most powerful message coming from the IOM’s report is that there is no reason for the out-of-control spending in healthcare to continue.  It is not leading to a higher quality of care.  It is having the exact opposite effect.  A smarter, more organized and harmonized approach to healthcare will go a very long way in saving the billions of dollars we so desperately need to shed from the runaway healthcare spending that has been dogging us for years.  And it can be done without any slashing of Medicare coverage, or jeopardizing the health of our seniors or any other segment of the population.  Hopefully, whichever candidate takes the reins in January will take serious heed of the IOM’s recommendations and the path it has set forth for spending a lot less to get us a whole lot more.

*     *     *

If you would like more information or would like to speak to a member of Constantine Cannon’s whistleblower lawyer team, please click here.