Needed: An Operational Visionary And I Don’t Mean A Surgeon
There is one sure way to improve the balance sheet of MD Anderson. Spend less. It’s already working as June’s financials demonstrated.
This seems like an obvious solution, but it is not, because everyone at Anderson is convinced that his or her project or area is the most important one—as they should—and each wants more resources to do more. I know. That used to be me begging for more slots for my office when I was a Vice President and I was mighty good at rationalizing why those slots were needed. I always chalked it up to compliance. It was a good line. It always got the lawyers’ attention.
In 2005, while still a vice president, I managed to develop a herniated disc at L3-4. I could barely walk and Ray Sawaya guided me to Larry Rhines to evaluate my acute onset disability. As most of you know, that usually requires an MRI.
During that clinic visit at least 17 people touched or questioned me. I think one nurse inserted the IV and another removed it.
A few years later, I developed some tingling in my left hand that was evaluated by a neurologist friend who sent me to Methodist for the MRI of my neck. Three people cared for me to acquire those images.
This may well be an apocryphal story, but that’s how I remember it.
There clearly must be an optimal amount of care that each patient requires. I suspect that it rests somewhere between three and seventeen handlers for an MRI.
I say this because I am convinced that one of the most important traits that the new president of MD Anderson will need to have is an understanding of hospital and clinic operations. And I don’t mean the kind that surgeons do.
In health care, one of the great expenses for all of it is overhead. This is the money spent on health care that does not deliver health care. It is all the paper work. All the bureaucracy. All the phone calls and all the secretarial or IS support. It’s air conditioning, too. It is also really all of insurance because no insurance company ever supplied any health care to anyone. They just pay for it while taking a cut for the shareholders. The amount insurers pay out for care is called the medical loss ratio. The ACA limited that to a maximum of 85%, but that’s still a pretty good margin (15%) for the insurers and most of them are doing just fine, even if many are pulling out of the ObamaCare exchanges. The ACA segment of the market was never going to be the big money maker. Commercial insurance is and that’s still a good business to be in.
It is likely that payment for health care is likely to become more value-based and less activity-based. At some point providers like doctors and hospitals will not get more for doing more, but will keep more for doing it in a less costly fashion. Thus, those institutions that can deliver a quality (whatever that means) product for less cost are likely to be the survivors.
For Anderson that is going to mean the delivery of the highest quality care (best outcome?) while spending less and also doing what needs to be done at Holcombe at 1515 and allowing what can be done in remote sites to be done there. That’s what I mean by improved operations.
If the new president is a master clinician with a deep understanding of cancer care delivery in an efficient and compassionate manner, I will bet that individual will be a success. If he or she thinks the route to MD Anderson’s restored greatness goes through a pharmacology lab, I am afraid we will have a third coming of a failed presidency.
How the place runs matters. Having grand ideas is great, but it neither pays the bills nor cares for the sick people. Operations are a big part of a modern hospital’s success or failure. The new president may be a surgeon, but the required operative fix stretches far beyond the operating theater.