Bending the cost curve in healthcare requires not only developing new payment models but also using the same data-driven rigor that is applied to healthcare-provider finances to the clinical realm, Yale-New Haven Health cardiologist says.
Finance is the key to fixing what ails the healthcare industry.
"The status quo is increasingly untenable, and it is because of the finances," Harlan Krumholz, MD, director of the Yale-New Haven Hospital Center for Outcomes Research & Evaluation in Connecticut, said Monday at the HFMA-ANI conference in Orlando, FL.
"You can figure out how to make the numbers work," the cardiologist told an audience of well over 100 healthcare-finance executives.
"If the numbers don't work, nothing is going to happen. And with a sixth of the U.S. economy dependent on healthcare, how much perturbation do you think is possible without people getting in the street and saying, 'You are threatening my job. You are disrupting our local economies. You are putting our lives at risk.'"
Sound financial leadership in the healthcare industry is critically important for the national economy, he said. "The economy is intrinsically dependent on the success of the healthcare system. … There cannot be a rapid disruption in healthcare without ripple effects throughout the entire nation."
Ongoing increases in healthcare costs pose a clear and present danger to the national economy, the cardiologist and prolific healthcare researcher said. "The one fact that is undeniable is that the continuing rise in healthcare costs cannot be sustained over the long haul."
Adopting Financial Principles in Clinical Care
Fundamental principles of finance such as accountability and reliance on data for good decision-making must be applied in the clinical setting, Krumholz said.
"What is important is that the finance work does not get sequestered from the intrinsically important work in the healthcare system. For a long time in healthcare, only the finances were heavily quantified to determine whether an organization was making any money, so governing boards disproportionately worked on finances. In many places, finance became sequestered distant from the clinical enterprise. That is not going to work in the future."
As an example, the cardiologist cited research he had conducted on underutilization of beta blockers even after studies had shown the drugs to be very effective in the treatment of heart attacks.
"Every time cardiologists had given beta blockers late, they had missed an opportunity to reduce risk and to improve outcomes, and they were wasting money. … These were all good doctors who were trying to deliver the very best care, with no insight into how these opportunities were being missed. It would be like finance executives trying to do their job without spreadsheets."
To deliver valuable services to their patients, clinicians need to establish the same level of mastery over data and setting best practices as healthcare-provider finance teams have established, he said.
"Measuring performance and setting standards in clinical areas should not be that much harder than measuring performance and setting standards for finances at hospitals and health systems. … Imagine working without spreadsheets and somebody asks, 'How are you doing? How is the balance sheet?' And you say, 'I can't tell you, but we're working our *** off.'"
With more and more patients struggling financially to pay the high out-of-pocket costs associated with high-deductible health plans, clinicians need to consider the financial consequences of care decisions, Krumholz said.
Christopher Cheney is the CMO editor at HealthLeaders.