The Two Steps to Fixing Healthcare

I focus mostly on aligning financial incentives to fix the healthcare system. But what about QI and implementation science–how do those fit with my interest in aligning incentives?

If you’ve ever been to an Institute for Healthcare Improvement conference, you have seen thousands of passionate individuals finding ways to improve healthcare, both from the provider level and the insurer level. I have sat through so many presentations by these innovators explaining their impressive improvements, and, in addition to being impressed at their work, I am almost always thinking, “They are working at odds with their financial incentives!” In other words, their QI efforts–were it not for them almost always being supported by grant funds–would be costing their organization a lot more money than the organization would ever make from those improvements.

Now, to be clear, making more money is not the main purpose of QI projects! They are improving patients’ lives, and that’s where the focus should be. But do you ever wonder why so many of those successful improvements don’t spread like wildfire through the country’s healthcare organizations?

The reason is because, while all good healthcare administrators truly want to improve the value their organization delivers to patients, they cannot be expected to add such costs to their balance sheet. There are too many uncertainties about reimbursement and government policy changes to take risks like that! And if they go bankrupt, they’re not doing patients any good.

An example from my residency clinic is having social workers full time in the clinic. We cared for many of the vulnerable populations of our city, and those social workers made a huge difference in many of our patients’ lives. But, were it not for grant money to pay those social workers, they would have been costing the clinic quite a bit of money (their salaries) without bringing any extra money in. This is one of thousands of examples in healthcare of what I refer to as “value improvements at the expense of profitability.”

Now, what if our healthcare system were designed in a way that, any time a provider or insurer improves value, they end up making more money as a result of it? What would happen to all those successful QI projects? They would disseminate like crazy. That is my goal.

This is why I think my work to align financial incentives in healthcare is actually the most important work the QI crowd could ask for right now. It’s Step 1 of fixing the healthcare system. And then they get to do Step 2 by responding to those good incentives by innovating in ways that improve the lives of the people they serve.