

The Henry Ford of Heart Surgery: a Factory Model for Hospitals - cwan
http://online.wsj.com/article/SB125875892887958111.html?mod=WSJ_hps_RIGHTTopCarousel

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iamelgringo
Part of the problem with doing this in the US is that cardiac surgery and
cardiac care is a major revenue center for US hospitals. US hospitals are law
bound to treat patients who come in their Emergency Rooms, regardless of
ability to pay. So, they lose money on patients who are uninsured or under-
insured and need expensive care, and then they make up the difference doing
expensive cardiac procedures, OB, orthopedic surgery, etc...

There is a growing move to go to specialized hospitals like Heart Hospitals,
Surgery Centers or stand alone OB centers in the US, because they are big
revenue generators for the owners of those specialty hospitals. But, while I'm
sure quality goes up at dedicated heart hospitals, it causes problems on the
macro scale, because those specialized hospitals drain patients with private
insurance that would otherwise be subsidizing patients without insurance at a
general hospital.

If you read between the lines of the article, what they don't say is they are
charging cash up front for many of those surgeries. Families with children
needing heart surgery that don't have insurance are forced to either pay cash
or their child likely dies an early death. It sounds like the are actually
turning patients away that don't have the money to pay for their surgery. You
can't do that in the US.

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djcapelis
You've just made an excellent argument for why universal coverage (of some
sort, public or private) is essential. This is part of why some starry-eyed
supporters predict cost savings.

Hard to argue too much, it sounds like they do more for better and cheaper,
which is a compelling combination.

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anamax
> You've just made an excellent argument for why universal coverage (of some
> sort, public or private) is essential.

Not at all. The factory model produces significant savings in processes
without anything like universal coverage.

For example, the factory model produces those benefits for for IC manufacture,
automobiles, clothing, printing, agriculture, etc.

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djcapelis
Uhm. I didn't say the factory model was an argument for universal coverage.

The argument however, that we couldn't take advantage of things like this in
this country in part because we didn't have universal coverage, was.

It appears you may have entirely misinterpreted my post.

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anamax
> I didn't say the factory model was an argument for universal coverage.

Whatever.

> The argument however, that we couldn't take advantage of things like this in
> this country in part because we didn't have universal coverage, was.

Except that that's not true. As other folks have pointed out, we're starting
to develop "heart surgery" factories and the like. Those folks also pointed
out that some mandates that approximate universal coverage (a hospital has to
take all comers) actually interfere with the development of factories because
factories specialize.

Note that requiring that something be open to everyone is an obstacle.

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donaldc
_His flagship heart hospital charges $2,000, on average, for open-heart
surgery, compared with hospitals in the U.S. that are paid between $20,000 and
$100,000, depending on the complexity of the surgery._

At only $2000 (or even $5000), and with better outcomes, I'm not sure why
anyone who needs open-heart surgery isn't heading to this facility. Even
factoring in transit costs, and paying out of one's own pocket, it's probably
less than a 10% or 20% copay on a $50,000 open-heart surgury done locally.

It does sound as if real competition is finally coming to surgical medicine.

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skmurphy
Two key points from the article:

"Health care needs process innovation, not product innovation. You can't do
one big thing and reduce the price, we have to do 1,000 small things." Dr.
Devi Shetty

Jack Lewin, chief executive of the American College of Cardiology, who visited
Dr. Shetty's hospital earlier this year as a guest lecturer, says Dr. Shetty
has used high volumes to improve quality. For one thing, some studies show
quality rises at hospitals that perform more surgeries for the simple reason
that doctors are getting more experience. And at Narayana, says Dr. Lewin, the
large number of patients allows individual doctors to focus on one or two
specific types of cardiac surgeries.

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kiba
Nice.

The only question is how to replicate this model in the United States in the
face of tremedeous political obstacles. (The AMA cartel, almost certainly lot
of paperworks and complicated rules, the FDA, etc)

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cwan
The idea has been developing. They call them ambulatory surgery centers in the
US. Regina Herzlinger coined the phrase "focused factory" if memory serves. Of
course they're nowhere near the cost of the Indian model but from what I
understand there's something called the Texas Heart Institute that performs
surgeries at costs dramatically lower than their more broad based peers
(<http://www.texasheartinstitute.org/>)

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skmurphy
Skinner, Wickham. "The Focused Factory." Harvard Business Review 52 (1974):
113-121.

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cwan
Sorry, I should have clarified that Herzlinger was at least one of the first
to use the term as it related to healthcare which was a bit controversial at
the time when she published her book Market Based Healthcare.

