OVER DIAGNOSIS: REDUCING WASTE AND ENHANCING QUALITY

SESSION OBJECTIVES

HEALTH AS A PRODUCTION FUNCTION

OBJECTIVES

1. ANALYZE THE PRODUCTION FUNCTION OF HEALTH

2. EVALUATE THE SEVEN WASTES OF HEALTHCARE

3.APPLY HEALTH ECONOMIC PRINCIPLE S to WASTE REDUCTION

4.APPLY LEAN SIX SIGMA PRINCIPLES TO WASTE REDUCTION

PRODUCTION FUNCTION OF HEALTH

Grossman’s Theory of Diminishing Returns

Grossman’s Theory of Health Investment

Production of Healthy Days

Health is a productive good which produces healthy days

Greater health stock leads to more healthy days – however with diminishing returns

Hmin is health stock minimum – production of healthy days at this point is zero i.e. death

Natural Maximum of 365 days

At POINT X, MORE and MORE INPUTS MAY NOT OFFER THE PATIENT BETTER HEALTH

A PHYSICIAN’S DILEMMA A 64 year old woman, Mrs G was rushed to the ER

with a history of acute respiratory distress. Dr Mark was called to see and he noted that the patient was an old patient of the hospital’s with metastatic bowel cancer.

She was unresponsive and afebrile with tachycardia and a right lower lobe consolidation. She was admitted into the ICU and placed on life support. She soon developed renal failure and her children were divided concerning whether she should commence 24 hour dialysis or not.

At this point Mrs G had spent 10 days in the ICU at a cost to the hospital of N500,000. The family was only able to pay 15% of the deposit at the point of admission. Does the Physician continue providing more services? This will require an additional 2 nurses and the services of a visiting nephrologist .

The principles of waste in healthcare

In the case of Mrs G, adding MORE INPUTS in the form of SPECIALIZED medical care could be considered a waste from a health economics view point. WHY?

Mrs G’s health status would probably not improve because she had a very poor prognosis

According to the law of diminishing returns Mrs G’s health stock had depreciated to the point in which more inputs would probably not improve her output(stock of healthy days)

THE SEVEN WASTES OF HEALTHCARE

WASTE 1: ERRORS & DEFECTS

Wrong Blood JUNE 9TH 2013

An 84-year-old woman died after Coney Island Hospital mistakenly gave her a transfusion of the wrong blood type.

Cost of litigation N100,000,000M

Out of court settlements

Wrong blood , right patient

REASONS FOR ERRORS: WHAT IS THE ERROR RISK HERE ?

ERROR NO 2: WHATS WRONG WITH THIS SCENARIO?

ERROR 3: NOVEMBER 2005-DIAGNOSIS OF BENIGN EXTRA- MAMMARY PAIN

Error 4: What’s likely to go wrong here?

Poly-pharmacy Trends in the U.S

WASTE 2:WAITING TIME- Exceeding 1 hour waits for cold cases

WASTE 3:TRANSFER/TRANSPORTATION TIMES: Waiting 72 hours or more for

lab results from external labs

WASTE 4:OVER PRODUCTION: Delayed Discharge or excessive ICU care

WASTE 5: OVER DIAGNOSIS /OVER PROCESSING; ordering a CT SCAN to rule out acute appendicitis or

kidney stones

WASTE 6: INVENTORY- High rates of expired drugs and over stocking

WASTE 7: PERSONNEL MOVEMENT

STRATEGIES for MANAGING WASTEEVALUATING PRODUCTION

INPUTS

EXAMINE YOUR PRODUCTION PROCESS

WHAT ARE YOUR INPUTS?

MANPOWER ?

MATERIALS ?

MACHINES ?

METHODS ?

How else can efficiency be improved?

OVER PAYING,UNDERPAYING & UNDER/OVER STAFFING ?

TAKING A LOOK AT a 3 year OVER PRODUCTION EXAMPLE in a 20

bed hospital (CAPITAL IS FIXED)INPUTS (LABOUR)

TOTALTPPRODUCTION

MARGINAL HEALTHPRODUCTION MP

AVERAGE HEALTH CAREPRODUCTION

No of hospital staff

No of patient visits/month

OUT PUT FOR ONE ADDITIONAL UNIT

MEAN OUTPUT

75 Yr 1 600 0 8

85 Yr 1 750 150 8.8

90 Yr 1 850 100 9.4

100 Yr 2 900 50 9.0

150 Yr 2 920 20 6.1

180 Yr 3 920 0 5.1

200 Yr 3 900 -20 4.5

The law of demand and supply

Excessive healthcare supply & manpower crashes the value of the care and the value of wages

(GO for quality not quantity)

Did you know ? That at high wage levels medical personnel do LESS WORK?

Grossman’s LEISURE-LABOUR model

1.Medical staff especially doctors and pharmacists,

allocate time between work and leisure

2. As income rises from BASELINE, medical staff will put in more labour hours eg substitution effect

3. As income increases to a threshold level, however, there is an income effect

4. After the income effect over rides the substitution effect, the medical employee will not increase his productivity DESPITE an increase in pay

The labour-leisure curve

QUALITY STRATEGY: POKA YOKETracking near misses and incidents

QUALITY STRATEGY: LEAN SIX SIGMA

QUALITY STRATEGY: STANDARDIZATION

Quick quiz: Identify the Waste 1

Identify the Waste 2

Identify the Waste 3

Identify the Waste 4

Thank you for listening !!