Who should be able to answer these business questions?

I wrote this piece for Hospital Impact, published April 22, 2010.  (Not the title I would have chosen.)


Now that spring is in full bloom, I’ve been doing a little gardening. My dogs are the anti-gardeners. No sooner do I turn my back after planting something, there they are, happily digging away and ceremoniously digging it up. I don’t know if that’s because they don’t like the particular plant, or just happen to disagree with where I planted it.

Today I discovered the youngest dog uprooted a plant and replaced it with a Reece’s Peanut Butter Cup. Perhaps she wanted to grow a candy tree.

One thing that always confuses me about gardening is this: When I plant a one-gallon shrub, I dig a two-gallon hole. I place the gallon shrub in the two-gallon hole and proceed to fill the remaining one gallon hole with the two gallons of dirt lying next to it. Without fail, there is never enough dirt to fill the hole. Perhaps you can tell me what I am doing wrong.

Here is another area of confusion for me: When you walk or are wheeled into a hospital, neither you nor anyone else knows the answer to anything.

That is astonishing. Nobody can tell you:

* With whom you will interact.
* How long you will stay.
* What will happen to you.
* How it will happen to you.
* When it will happen to you.
* Who will be doing the happening.
* Exactly when it will happen.
* Whether it will need to happen again.
* What it will cost.
* What you will be charged.
* What will be covered.
* How much you will owe.

I am stupefied. How can anyone run a business like this? My daughter knows what her lemonade stand costs per cup. Wendy’s knows the cost of a bag of fries and a large Frosty. Porsche knows the cost of a Cabriolet, the cost of the shift knob, when the wheels will arrive at the factory, when they will be placed on the car, who will build it, who will inspect it, and who will sell it. They can tell you exactly who will touch the car, when they will touch it, and what those people will do to it.

The only thing anyone at a hospital may be able to tell you is whether HBO is billed separately. If I wanted to fly into space with the Russians, I would know the answer to each of those questions. The cost, for example: $50 million.

Why can’t a hospital do this? Because it doesn’t know the answers. It is not because anyone is keeping this information a secret–it’s because they really don’t know. The truly strange thing is that they seem to be okay with not knowing.

Recently, I reconnected with a good friend whom I haven’t seen in years. He is the vice president of finance for a large hospital. He used to be an accountant–a very detailed and precise profession, unless you’re one of the guys who used to do Enron’s books. (The only thing I remember about accounting is that debits are by the window and credits are by the door–if I’m in the wrong room, I’m at a total loss.) This business must drive him nuts!

And so I’ve been wondering; would hospitals be more profitable if:

* They had a P&L by patient?
* They had a P&L per procedure?
* The steps for the same procedure, say a hip replacement, were identical each time?
* They had answers to any of the questions you read above?

Of course they would!

Some areas of healthcare already discovered this tautology–Lasik, endoscopy, the Minute Clinic. Assembly-line medicine. Some people say those words with an expression on their face as though they’d just found a hair in their pasta. The office of my Lasik surgeon looked more impressive than the lobby of my Hyde Park hotel. It may leave a bad taste in the mouth of some, but for others, they are laughing all the way to the bank.

saint Paul M. Roemer
Chief Imaginist, Healthcare IT Strategy

1475 Luna Drive, Downingtown, PA 19335
+1 (484) 885-6942

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4 thoughts on “Who should be able to answer these business questions?

  1. Going to the hospital is kind of like creating a new computer system. Until you know what the problem you can’t answer any of your questions. Once you learn what the problem is, you can’t answer most of your questions because every patient/attending physician and every using organization/system development team is different. How different? Quit a bit or not very much but in either case hard to judge early on.

    Procedure or system, some of the parts are standard and for those parts your questions can be answered. I will agree with you that business has done a much better job of finding what is common then honing it to reduce costs and improve quality then doing essentially the same thing over and over again. And, as you point out we are beginning to see some assembly line medicine for reasons best described by Clayton Christensen in The Innovator’s Prescription: A Disruptive Solution for Health Care.

    I have absolutely no idea where all the dirt goes.

    Hal Amens http://halwrites.biz/re/


  2. Nice Post Paul. Our clients know what their costs are… They not only access the pricing and practice guidelines for each physician right through our site, once a financial transaction occurs, they then have record, as soon as the physician finishes his note, leaves the house, concludes the telemedicine visit, etcetera…

    Transparency is beautiful for consumers, but the resulting cost savings for the physicians in ” virtual practice” is the end result of the innovation…

    For physicians’ charting in real time throughout the day in the PM platform is a much easier task in a disruptive model that is built around families. Trying to chart real time in the third party payor model using horrible UI HIT doing ” Volume Medicine”is a nightmare.

    Here is the educational message for Primary Care Docs and Physician Groups, and Hospital Employee Physician Groups who are paying attention : Disrupt or be disrupted…

    What is the most recent tally on Retail Prim Care?? My last read half a billion…

    Best, Natalie


    Needs Analysis Summary for CME Innovation Education for Docs…



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