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Structure of us healthcare


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Structure of US Healthcare industry determines its economic performance

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Structure of us healthcare

  1. 1. OVERALL USHEALTHCARE INDUSTRY STRUCTURE Presented by Philip Corsano CEO Gnostam Consulting
  2. 2. How to drive costs down?—  Collect data, is there an “exchange” where the data for price and service delivery lives?—  Understand what part of the “value chain” you occupy;—  Build an economic model;—  Optimize strategic choice by running scenarios’s;—  Quality improvements;—  Process improvements;
  3. 3. The Problem ~ Complexity
  4. 4. Healthcare Exchange
  5. 5. The Problem—  Overuse, inappropriate use of care, fee for service;—  Payment incentivizes delivery of more service;—  Old oligopolistic market structure, favors big pharma, big insurers, and suppliers who restrict efficient price discovery;—  Barriers to access in primary, preventive care, leads to over use of Hospital admissions, ER and complications of chronic acute disease.
  6. 6. The US Heathcare System
  7. 7. Health Care Costs Concentrated in Sick Few—Sickest 10 Percent Account for 64 Percent of Expenses 1% 5% $36,280 24% 49% $12,046 50% $715 Distribution of health expenditures for the U.S. population, by magnitude of expenditure, 2003
  8. 8. The Model—  First acquire the procedure data, best if payment for services with an outcome:—  Is there an obvious process for price discovery?—  Is the data in a form that allows for like with like comparisons?—  Is there a model against which to benchmark?—  Is there a process improvement component?—  Is there a quality control, reliability component?
  9. 9. Quality Assurance Improvement Threshold Threshold Improvementbetter worse worse
  10. 10. Quality Improvement In this case the whole process delivery system is overhauledbetter worse better worse
  11. 11. Costs of Care for Medicare Beneficiaries with Multiple Chronic Conditions, by Hospital Referral Regions, 2001 Ratio of percentile Average annual reimbursement groups 10th 25th 75th 90th 90th to 75th to Average percentile percentile percentile percentile 10th 25thAll 3 conditions(Diabetes + CHF $31,792 $20,960 $23,973 $37,879 $43,973 2.10 1.58+ COPD)Diabetes + CHF $18,461 $12,747 $14,355 $20,592 $27,310 2.14 1.43Diabetes + COPD $13,188 $8,872 $10,304 $15,246 $18,024 2.03 1.48CHF + COPD $22,415 $15,355 $17,312 $25,023 $32,732 2.13 1.45 CHF = Congestive heart failure; COPD = Chronic obstructive pulmonary disease. Data: G. Anderson and R. Herbert, Johns Hopkins University analysis of 2001 Medicare Standard Analytical Files (SAF) 5% Inpatient Data.
  12. 12. How “BreakthroughImprovement” manifests itself B A Incremental Breakthrough Refinements Breakthrough improvements Vision/ to vision/ Vision/ Redefine context Redefining Context Context
  13. 13. Continuous feedback loop strategic model
  14. 14. Tools for Improving How We Do Our Work: Improving the Process Process flowchart Cause and effect Category Frequency A lll Data Collection B llll ll C llll Data Analysis
  15. 15. Tools for improving what we do: Content Benchmarking best practice Field force analysis Driving Restraining Evidence based practice, run scenario’s
  16. 16. Leverage performance improvements How we think Appreciating a Systems Perspective What we do Addressing Underlying Assumptions: •Goals •Purpose •Measurement •Traction •Implementation •Teams How we do it •Improving Content •Improving Content •Improving Process •Improving Process •Improving ProcessLow leverage High Leverage
  17. 17. Thank youfor your attention Philip Corsano Gnostam Consulting LLC 5731 Kirkwood Place N Seattle, WA 98103E-mail: or Tel 206 384 0069
  18. 18. One idea for the New System, Medicare for all. REJECTED