For many lucky people who have never been hospitalised, the popular image of hospitals is a glamorous one, as portrayed on hit television shows like Casualty, Grey’s Anatomy and House.
by Stefan Scholtes, Dennis Gillings Professor of Health Management
In a typical TV hospital, teams of doctors and nurses wrestle with complex and even mysterious afflictions – and often come up with ingenious solutions to treat a patient, perhaps saving a life in the course of a dramatic hour.
Away from fictional drama, the reality is that much activity that occurs at public hospitals is not very dramatic at all – but in fact usually involves routine (if painful) procedures that don’t require much brainstorming, but eat up plenty of time and resources. It’s the routine care that is causing constipation in hospitals, clogging up the system and leading to financial problems at even the most enlightened hospitals.
Hospitals are portrayed on TV as places of scientific precision (with some romance often thrown in), but in fact hospitals are poorly set up to develop processes that function like Swiss clockwork.
A new study by NHS Improvement tells us that 280,000 more non-emergency operations a year could be done if the theatre processes were better organised. But anyone who has tried to make hospital theatres start on time will know how hard that can be: many processes need alignment for operations to start at a scheduled time, so a single call from the emergency department can collapse the whole house of cards. If we want hospital processes for routine patients to run more like Swiss clockwork (and they should), then we need to ring-fence them rigorously from the hothouse of an acute hospital.
Currently, divisions in hospitals are structured around medical specialties – surgery, cardiology, neurology, obstetrics and the like. But each of these divisions intermingles routine and non-routine procedures, so professionals are not free to focus on one or the other.
Certain very common procedures like hip replacements, hernia or cataract operations require skill and dedication, but they are everyday operations that benefit from standarisation. These activities don’t usually require intricate decision-making on the part of doctors and nurses, and would benefit if separated entirely from non-routine services that require complex solutions, flexibility and multi-disciplinary collaboration.
Take cataract surgery: at the Aravind Eye Hospitals chain in India, the average cost of such procedures is $42-$125 (US dollars) depending on the choice of lens used, while in Britain the average cost for National Health Service cataract surgery is £243 to £1,361 depending on the procedure and complexity of the operation. The Aravind results are just as good if not better than those of most NHS hospitals.
Granted, most costs are lower in India than in Britain, but Aravind does work like a Swiss clock: an Aravind eye surgeon averages 65 operations a day, while the most efficient lists in the UK may allow a surgeon to do 14 such operations. Aravind staff have a unique focus on cataracts and don’t have to serve dozens of other clients if and when needs arise.
So why don’t hospital administrators “cut loose” and shed routine procedures to other providers? The reason lies in the way we reimburse hospitals, which are paid a national tariff per patient episode, depending on the procedure and complexity of the patient. Such piece rate payments make little sense for hospital managers who don’t know the true cost of a patient episode because a whole host of processes are shared in an ad hoc way, to the benefit of the patient at hand.
The impossibility to cost an episode and adjust costs when volumes change makes the hospital essentially a “fixed cost” operation like an airline, so any loss in tariff income will be detrimental to the hospital’s financial position. Since routine services are often high volume, they are an important part of a hospital’s income, so finance directors won’t cut them loose. A few weeks ago, I learned about the experience of a primary care practice that makes the point: GPs and ophthalmologists at the hospital had agreed to move some specialist ophthalmology services into the more suitable primary care environment, and had produced a clinical and business case – only to be turned down by the hospital’s finance administrators, who were afraid to lose the income.
So what can be done? One possibility would be to change the reimbursement model and incentivise hospitals to shed routine services. That would require a change of the entire system, which is politically tricky and, even if agreed, would take years to implement. As an alternative, hospitals themselves should take charge of the situation and restructure internally by ring-fencing their routine care organisationally and physically. A neurosurgeon, for example, might spend two days a week in the “factory” for routine operations and three days in the acute hospital for complex situations.
One thing is for sure: the status quo is certainly not the answer. By continuing to lump all procedures in the same basket, hospitals will stymy technological and operational efficiencies that could help alleviate their financial pressures over time. Patients will be poorer for it – which, as TV scriptwriters might say, is a real Downer Ending, and the critical reviews will be scathing.
A version of the story initially appeared in the Cambridge Independent.