Boston’s Top Docs: 14 Medical Breakthroughs
Putting Doctors on the Clock
EARLIER THIS YEAR, two Harvard Business School professors had a thought. What if, instead of relying on arbitrary estimates from Medicaid or Medicare, hospitals could determine what healthcare procedures actually cost? To find out, they asked two Boston surgeons to introduce a new tool to their medical kits: a stopwatch.
Professor Robert Kaplan’s theory, “Time-Driven Activity-Based Costing,” has been used by businesses across the country to help track efficiency and outcomes. But it’s never been tried in a hospital setting, in part because we prefer our doctors to focus on saving lives rather than worrying about the cost of care. But that’s left a huge gap in understanding, says Kaplan’s colleague, Michael Porter, who has researched healthcare delivery for more than a decade: “It’s not because of how physicians are trained. They’ve just never had any way of knowing or thinking about it.”
The professors launched a pilot program, recruiting John Wright, who performs knee replacement procedures at Brigham and Women’s, and John Meara, who runs the cleft palate unit at Children’s Hospital, to take part. The doctors asked their staffs to help them map out each step in a patient’s treatment, from the moment they’re checked in at the door of the hospital to their final follow-up visit. A per-minute cost was then calculated based on the time that each doctor, nurse, clinician, or assistant spent with the patient. Then all of the overhead costs were factored in — equipment, electricity, cleaning and sanitizing of tools — and were added up to create a full cycle of care.
Mapping the process allowed the doctors to identify inefficiencies, like the amount of time nurses spent filling out paperwork instead of tending to patients. And it enabled them to look at how well their patients fared relative to how much money was spent on their care. In one example, Meara found that when it comes to cleft palates, 40 percent of the costs incurred over 18 months of care stemmed from the few days a child spent in the ICU after surgery. He then determined that the same child could, with just a bit of extra oversight, recover equally well in a less-expensive general wing of the hospital. For his part, Wright learned that an exercise machine used to strengthen the knee after surgery was actually detrimental to patients. So he transferred the cost of the machine to more physical therapy, and his patients wound up recovering faster.
Could these results lead to an entirely new financial plan for hospitals? It’s too early to know for sure, but the business professors’ cost-mapping idea has proven to be a valuable start. “We’re spending too much money and we’re not sure whether we’re getting the value for it,” says Wright. “We can’t afford to continue to run the system as we are.” — J.N.