The Supreme Court today upheld the Affordable Care Act and determined the individual mandate is a tax and therefore constitutional for Congress and the president to implement. While the ruling is significant for health care, it will have less impact on improving the nation’s care delivery system than the overhaul that is already under way by private-sector health care providers, according to Scripps Health, a national leader in the movement to redesign health care delivery.
“The Supreme Court’s decision is a historic moment for this country, but regardless of what the court had decided, health care in this country is already changing and must keep evolving, because it’s broken,” said Chris Van Gorder, president and CEO of Scripps Health and former chairman of the American College of Healthcare Executives. “This crisis presents a challenge and an incredible opportunity for physicians and hospitals to fundamentally reshape the future of health care.”
Less than two years after implementing a major organizational restructuring, Scripps Health has achieved steady, significant gains, both as a provider and as a business. The health system’s efforts have centered on improving the quality of patient care while cutting the cost of care delivery – both achieved by identifying and reducing unnecessary variation and redundancy within health care operations, and replacing old systems with more innovative approaches and technologies.
Instead of operating five separate hospital campuses and more than 20 different outpatient clinics in a siloed approach as it formerly did, Scripps has shifted to a “horizontal management” structure that identifies and implements best practices in patient care and operations across the entire system. Last fiscal year alone, Scripps realized a performance improvement of $77 million. The following are some examples of improvements Scripps has achieved since its new structure was put into place in October 2010. Many more programs are in pilot phases or are under development.
Implementing a new process for assessing and treating patients has cut emergency room wait times down to 30 minutes or less. The shorter wait times have allowed for 21,000 more patients to be seen and have contributed $19 million to the bottom line.
Scripps has realized a savings of $14 million in pharmacy operations by centralizing purchasing and renegotiating contracts to maximize discounts on everything from pharmaceuticals to software. Investments in new technology are expected to yield additional cost savings of $5 million over the next four years. Quality and safety for patients is being improved through more rigorous internal audits and new barcode systems.
Eliminating high-priced service and rental contracts has led to substantial savings. In-sourcing supply chain operations has led to better supply contracts and more efficient supply stocking for an estimated savings of $22.6 million over three years.
By consolidating its hospital-based labs into a more efficient central medical lab, Scripps has lowered overhead and increased volume. Its automated processing center (first of its kind in the United States) and standardized lab practices will enhance quality and patient safety and save an estimated $6 million annually.
“Today, health care is a sick business, one that’s in business to care for the sick,” Van Gorder said. “We must shift to become a wellness business, one that’s focused and financially rewarded for keeping patients well. At Scripps, we’re knitting together what has been a fragmented delivery system through a focus on streamlined management in the hospital and ambulatory setting, And we’re making the most of the new tools we have in genomics and innovative wireless technologies to allow us to monitor populations at risk or with chronic illnesses and to deliver individualized medicine.”
Providing these tools and the right delivery system will mean patients can be more of a partner in managing their health, improving the quality of care while cutting costs. Individualized medicine is arguably the ultimate example of how to reduce spending while providing the best in care. For example, approximately a third of the $350 billion a year spent on prescriptions is a waste because the drugs don’t work for everyone. Genomic screenings can help tailor medications to an individual’s needs – a safer and more economical approach, which Scripps has implemented for Plavix and interferon and is exploring for other medications.
“The solution to fixing our health care system will be based on a focus on our patients,” Van Gorder said. “That may sound obvious, but it could be argued that the current system was built for providers – not patients. If we do what’s right for patients, we’re never going to be wrong.”
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