The Glass Hospital: Transparency in quality for a consumer-driven healthcare system
Free market competition within the service industry is usually beneficial for all participants, especially the consumer. Aggressive competition amongst competitors drives innovation of new goods and services and also leads to bargain prices for the consumer. In a similar fashion, healthcare is part of the service industry and increased competition amongst providers should lead to cost stabilization and advancements in healthcare services.
Unfortunately, multiple barriers limit the healthcare industry from behaving like other service industries. Let’s take a detour to those barriers by first considering what happens in a “typical” service industry under free market conditions. Imagine taking a trip to China. You go online to compare flight costs among competing airlines, find a good deal, pay for your ticket, and off you go. Done. In a few hours, you can be on a plane going halfway around the world.
Why is it, then, so hard to find the best deal on healthcare right here in our backyard? Unfortunately, things are not as smooth in the healthcare industry. Services are “atypical” and here are a few important reasons why:
- Healthcare consumers don’t know what services they need.
- Healthcare consumers are unaware of the true cost of rendered services.
- Healthcare consumers are not fully responsible for the actual cost of those services (unless they pay for services fully out-of-pocket, like the plane ticket to China).
Thus the uninformed patient cannot take full responsibility and act as a true consumer in a market where the price of healthcare is inexplicit and services are unpredictable—unlike comparing flight costs online for the best deal.
The “value” of a service, however, is not solely based on cost—it is also dependent on quality. If costs are unequivocally defined, why not use measures of healthcare quality instead to inform the patient and be the basis of free market competition for providers? For this to happen, we need more transparency.
The statewide collection of cardiac surgery outcomes data in New York began during the 1970s under the direction of the Cardiac Advisory Committee, which reported to the state Department of Health. Large variations in hospital mortality rates were observed and, at the request of Dr. David Axelrod (then-commissioner), a risk-adjusted system was developed for use by 1989.
In December of 1990, an article was published in the Journal of American Medical Association (JAMA) highlighting the risk-adjusted cardiac surgery mortality data for 28 unidentified hospitals within the state.[1] However, Dr. Axelrod decided to release the identity of those hospitals to the media, and during the same month, an article exposing the hospitals appeared in New York Newsday, titled – “Ranking Open-Heart Surgery: State Study Lists Best Hospitals.” The following year, New York Newsday filed a lawsuit against the New York State Department of Health for refusing to provide the available surgeon-specific, risk-adjusted, mortality data. The state Supreme Court decided in favor of the media outlet, citing stipulations of the Freedom of Information Act – granting complete public access to certain information collected by the government, such as cardiac care mortality.[2]
Since then, the results have been used to create a cardiac care profile system that assesses the performance of hospitals and doctors at three year intervals for coronary artery bypass grafts (CABG), valve surgery, and percutaneous coronary interventions (PCI); while taking into consideration the severity of each individual patient’s pre–operative conditions. The transparency of such information accomplished a few goals. First, it supported patients to make an informed decision regarding their cardiac care based on reported quality outcomes. Second, it stimulated the accountability of hospitals and physicians. And third, it intensified competition amongst providers; encouraging ongoing improvement in quality cardiac care so as to secure both the patient’s confidence and business (market share).
The New York Cardiac Advisory Committee is responsible for reviewing and interpreting the collected data; thereafter, it advises the Department of Health about the hospitals and physicians that may need “special” attention. The committee also conducts site visits and has recommended using the expertise of external consultants to implement improvement programs at sites that may benefit the most.
What has been the result of this two-decade-old performance data tracking and reporting initiative? New York continues to have one of the lowest risk-adjusted mortality rates following cardiac surgery in the nation. In fact, the mortality rate for bypass surgery has fallen by over 40 percent since the publication of this first report. Cardiac bypass procedures decreased from 20,220 in 1997 to 11,445 in 2007 – suggesting that quality care does not necessarily equate to the number of successful procedures, but includes the number of potentially non-beneficial surgeries that were avoided. In the most recent report, mortality rates for CABG fell from 1.79 percent in 2009 to 1.58 percent in 2010.[3,4]
Needless to assume, the reduction in volume of procedures and mortality may have had led to significant cost savings. The trend of procedure rates in the Medicare population has been presented below using data from the Dartmouth Atlas:
The state of New York is a pioneer in establishing this useful reporting system for patient knowledge and provider improvement. Implementing such a system nationwide and comparing hospitals in a local market makes sense—and has obvious benefits, not to mention the ethical appropriateness of transparency.
But why stop at mortality? What if the registry reported outcomes such as length of stay, readmission rates, infection rates and other complications? Imagine publically available data for all major diagnoses and associated procedures? What if public and private health insurers effectively promoted and provided quality outcomes data to their subscribers – empowering them as informed consumers? In fact, a strategic priority for Accountable Care Organizations will be the utilization of electronic health records and Health Information Exchange to support detailed quality measurement and performance reporting, including the ability to retrieve individual provider performance – thus promoting accountability amongst physicians.
True competition in healthcare must occur at the point of patient care, where efficiency and quality matters –that is what patients really want.
Anubhav Kaul, MD, is a recent medical graduate from Ross University School of Medicine and a future medicine resident at Lahey Hospital and Medical Center. He is currently pursuing a Masters in Public Health at The Dartmouth Institute for Health Policy and Clinical Practice.
Mahad Minhas is pursuing a Masters in Public Health at The Dartmouth Institute for Health Policy and Clinical Practice. He is a perspective medical student.
Komal Talati, MD, is a graduate of Brown medical school, a current first year resident in New York, and continuing her training in radiology at Beth Israel Deaconess Medical Center.
References
- Hannan EL, Kilburn H Jr, O'Donnell JF, Lukacik G, Shields EP. Adult open heart surgery in New York state: an analysis of risk factors and hospital mortality rates. JAMA 1990;264:2768-74.
- Harlan BJ. Statewide reporting of coronary artery surgery results: a view from California. J Thorac Cardiovasc Surg. 2001 Mar;121(3):409-17.
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“At New York Hospitals, Heart Patients' Death Rates Are an Open Book”
http://health.usnews.com/health-news/blogs/second-opinion/2012/10/18/at-new-york-hospitals-heart-patients-death-rates-are-an-open-book -
“New York State Report Recognizes North Shore and LIJ Cardiac Programs”
http://www.northshorelij.com/cardiac/heart-health-updates/cardiac-doh-rankings
