Quality of care versus cost of care: The awkward choice

By Shawn Vincent

As a software engineer, I like well-defined problems. So, when I started diving into the complex world of healthcare IT, I tried to identify: What problem are we trying to solve? When you back way up, what are the real issues at play? One of the really nice things about this industry is that you’re doing real good: One of the main goals of all of this stuff is to improve quality of care: literally, saving people’s lives. That makes me feel pretty good and gives me something wholesome to talk about at family dinners.

Unfortunately, health care doesn’t exist in a vacuum, and somebody has to pay for all of the lives that we’re busy saving. Worse than that, it seems like somebody somewhere messed up: Health care costs way too much. Thus, the second major goal is: Reduce the cost of care.

The thing that people don’t talk about so much is that, in many cases, improving the quality of care and reducing cost of care are often in opposition. Projects that improve care often increase costs, and projects that decrease costs can degrade care. Understanding the interplay between these two goals is important in the quest to build useful solutions that don’t cause real problems.

Why does health care cost so much? Let me begin with an example. Imagine that you’re a drug company, and you’ve come up with a new pill that reduces the mortality rate of a certain type of cancer by 10%. Even better, it has fewer side effects than the previous “best” drug. This is a really BIG deal – many lives will be saved. To pay for the research that led to this new wonder pill, the new drug will cost twice as much as the old drug.

Now, think about this for a minute: 200% more cost for 10% less mortality. Is this tradeoff ‘worth it?’ Pretty much to the person, everyone reading this statement will be offended that I’d even ask the question. Of course it’s worth it! Think of all of the lives we will save! If it was your cancer, or your grandmother’s or child’s cancer, of course it’s worth it. There is no price you can place on a human life.

But in this example, we’ve made the tradeoff between the two major goals of health care. We’ve chosen quality of care over cost of care. If you make this particular tradeoff enough times, there will not be enough money available to pay for all of the health care that people need. At some point, the healthcare system fails economically.

I could run through many examples. Sometimes, people choose quality; sometimes, people choose cost (even though they ‘seem’ to usually choose quality). This is a divisive issue, and emotions run high.

I’m a pragmatist, and this dilemma doesn’t seem to be resolvable any time soon. How can one take a pragmatic view and do good work without resolving this dilemma?

Simply this: Understand the quality/cost tradeoff and make choices mindfully. The worst thing to do is to either deny that this tradeoff exists or to make decisions without knowing what tradeoff it is that you’re actually making.

There are four types of solutions:

1. Solutions that improve care while increasing costs. More lives saved, bigger draw on the bank. This is, by far, the most common solution offered. New treatments, new equipment, new sensors, more data for better diagnoses – these sorts of solutions improve care and, together, define the rise of modern medicine. They also make medicine expensive.

2. Solutions that decrease costs while degrading care. These solutions are more rare. Typically, these sorts of solutions are put in place by folks who are accountable for the bottom line. There is a limit to how much money can be spent – and sometimes the best possible care has to suffer in the face of economic realities. Witness the ‘Third World’ and underfunded inner city clinics for many examples of this.

3. Solutions that improve care AND decrease costs. Here, we get a healthier population for less than we were spending before arriving at the solution. These solutions are worth their weight in gold. A great example is preventative care: Vaccinations, hygiene and prenatal care provide huge health benefits for relatively small investments.

4. Solutions that degrade care and cost more. Unfortunately, this scenario is way more common than anyone would like. Generally, a solution like this is one that is considered a ‘failure’. I am not going to give an example here, as I don’t want to single out particular failed projects – they’ve suffered enough. If you’ve been in this industry for awhile, you’ll know the examples: projects that never went live; projects that went live but were rejected by the user community; projects that went vastly over budget; projects that made things worse.

Solutions of type 1, 2 and 3 are “good” solutions. We could have day-long political arguments about whether solution 1 or 2 is superior, whether 3 is common or rare, and what category a particular project lies in. It doesn’t really matter: All of them do some good.

The real problem is type 4. How do we make sure that we’re investing in solutions that at least improve care OR decrease costs? These projects are failures.

My advice:

First, do your homework before you start. Before investing in a solution, ensure that reasonable analysis and research have been done to convince rational people that the project will decrease costs and/or increase quality of care. Ensure that this analysis is examined critically, and that there are not more straightforward ways to explore possibly decreasing the cost or increasing the viability of the project.

Second, invest as little as possible to test whether the project is viable. In this way, you can weed out the ideas that looked good on paper, with minimal investment. There are many modern techniques, such as Pretotyping (http://www.pretotyping.org/pretotype-it---the-book) and Minimal Viable Product (http://www.startuplessonslearned.com/2009/03/minimum-viable-product.html) that can be used to test out ideas.

Third, keep it simple. Build simpler, more general solutions, rather than complex, specific solutions. Get version 1 into the field before you add the bells and whistles. Simpler solutions are cheaper – so, if they fail, you’ve lost less time. Simpler solutions are easier to analyze – so you’re more likely to know up front if they will fail. Finally, simple solutions are easier to evolve as real-world experience provides more useful information.

Finally, have modest expectations regarding benefits. Rather than trying to solve all of the problems in the first go, try for some specific, limited benefits. A solution can be evolved and expanded on over time – money spent on failures is simply gone.
Quality of care and cost of care are independent forces that often oppose one another – as one gets better, the other often gets worse. It’s important to understand this, and make mindful decisions about projects that are intended to provide benefits. If somebody is promising to solve all of the world’s problems, and it’s not clear how these benefits will be realized – chances are, you’re looking at a failed project in the making.

Shawn Vincent is Vice President, R&D at MD Practice Software LP.

Posted November 8, 2012