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Archive for the ‘Health care’ Category

For all the faults of its roll out, the Affordable Care Act should ultimately provide more people with health insurance and thus a way to pay for basic health care. That implicitly assumes that there is enough health-care capacity to go around. There is a very real concern that there is not enough capacity — particularly in primary care — to properly cope with an influx of newly insured patients who will want to do basic things like see a doctor.

If capacity is going to be tight, then there is a premium on making sure it is not wasted. That, as Marketplace reports, means that clinics are experimenting with overbooking (How post-ACA health care is like the airline business, Dec 5).

Here is the part I want to talk about:

Cooper University Hospital is expecting a huge wave of patients starting next month, as millions of consumers get health insurance, some for the first time. The question for hospital executives in Camden, and around the country, is how to manage this new population. For one, there is a chance this new patient population will exacerbate existing problems at Cooper.

Today, “the patient no-show rate is in high 20s, 25, 30 percent,” says Jonathan Vogan, the associate director for financial and performance measurement at Cooper’s outpatient clinic, the Urban Health Institute.

The Urban Health Institute serves more than 8,000 patients, virtually all of them low-income. Vogan says the poorer the patients, the more likely they’ll miss their appointments. And that’s an expensive problem. But Vogan says the solution is simple.

“If not all of your patients show up then the easiest thing to do is, well, just book more of them,” he says.

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It is hard to think of a more challenging problem: How do you distribute necessary medicines in a developing country lacking infrastructure? That is question tackled by Simon and Jane Berry, two Brits trying to reduce childhood deaths from diarrhea in Africa. Diarrhea is the leading cause of death for children under five — which is tragic since it is not some mysterious disease. It is completely treatable by standard and (in the grand scheme of things) cheap medicines. But you need to get the medicines out to rural areas. The Berry’s solution was a packaging innovation that lets them piggyback on existing, super efficient supply chain. Whose supply chain? Here’s a hint, their not-for-profit is called ColaLife (ColaLife: Turning profits into healthy babies, BBC, Jul 22).

Simon Berry and his wife Jane had come up with a strikingly-simple idea – a package for medicine that slotted into the empty space at the top of a crate of soft drink bottles, fitting neatly in between the bottlenecks.

A dazzling idea, to piggyback the delivery of the diarrhoea medicine for babies onto one of the most efficient distribution systems in the world. Go anywhere and you will find a shop selling Coca-Cola. And the plastic packaging is ingenious – once opened it becomes a measuring device.

Here is what ColaLife’s anti-diarrheal kits look like sitting in the crates.

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Here is how the crates get out to villages.

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It’s been a bad flu season with hospitals in many cities overwhelmed with patients. This is largely a preventable problem. The annual flu vaccine is not perfect but a wider use of the vaccine would provide some amelioration. So why don’t more people get a flu shot? Some reporter at the LA Times seemed to think that cost might be a factor (Why does a flu shot cost so much?, Jan 21). After all, getting the shot at your local pharmacy will set you back $30 or so. However, as the reporter found out, given the supply chain challenges of producing and distributing influenza vaccines, the real question is why flu shots cost so little.

That’s because the process of manufacturing the flu shot and distributing it is a huge headache for pharmaceutical companies. The influenza vaccine must be made anew each year, beginning in February. Researchers determine what strains to put in the vaccine after looking closely at what types of flu are most prevalent in the Southern Hemisphere throughout its winter, which is our summer. …

Vaccines for other illnesses, such as measles, mumps and rubella, can be used until their expiration date, which is often years after they’re made. Influenza vaccines are really only used September through January and then go in the trash. And there are no regulations saying people have to get flu vaccines, meaning it’s very difficult for companies to estimate how many they should make. …

This year, companies have produced about 145 million doses, he said. Only about 129 million have been distributed. Last year, companies lost even more on the flu vaccine because it was such a light flu season and fewer people decided to get the shot. Only about 42% of the U.S. population got an influenza vaccine last year, which meant that about 30 million doses were never used and had to be destroyed.

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Over the years, we have had several posts applying lean operations to health care (see, for example, this or that). However, we have yet (I think) to post anything on Virginia Mason. Despite what its name might suggest, Virginia Mason is located in Seattle and has long been known as a leader in taking lessons from Toyota and applying them to health care. Now, in the form of a report from PBS’s NewsHour, we have an excuse to remedy that oversight (Rooting Out Waste in Health Care by Taking Cue From Toyota Assembly Lines, Oct 24). Check it out!

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The NY Times (“In Discarding of Kidneys, System Reveals Its Flaws“) had an interesting article on one of the main issues of Kidney allocation:

 Last year, 4,720 people died while waiting for kidney transplants in the United States. And yet, as in each of the last five years, more than 2,600 kidneys were recovered from deceased donors and then discarded without being transplanted, government data show.

The question is why. One may conclude that the system is just inefficient, yet a closer look reveals that this inefficiency is rooted in many important principles, regulations, and incentives, all while attempting to create a fair system.  In order to better understand the issues, we need to understand how kidneys are being allocated in the US: The country is divided into 58 districts. When a kidney of a deceased person becomes available, the system allocates it to the person with the highest priority within that region. This priority is a function of the waiting time, whether a recipient is a child or not, as well as other factors. The system does not consider the projected life expectancy of the recipient or the urgency of the transplant. The allocation is initially local, and only when there is no match, the search expands to other regions. All of that is done while competing against the clock: Kidneys start to degrade after 24-36 hours.  The system is allowed to make offers to only a limited set of hospitals at any point in time, and these, in turn, have an hour to respond.

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It’s time to clear out a bunch of articles of that I have had kicking around. First up, we note that it has been Fashion Week in New York and that has led a couple of interesting articles:

  • The New Yorker has a profile of Federico Marchetti and his company Yoox (The Geek of Chic, Sep 10). Yoox does a couple of things. It started by selling end of season luxury fashions. It won friends in the industry by just posting their own price with noting how much it was discounted off the list price. Luxury brands liked that this allowed them to unload unsold items without tying their brand to a 50% off sign. The interesting part is that Yoox was able to provide the brands with information they never had before (like what colors were selling where). Yoox has since expanded and now provides the backend and fulfillment for multiple designers’ web stores.
  • At a different end of the market, Wired had an interview with Yasunobu Kyogoku, the COO of Uniqlo USA, which is ramping up a big US expansion (Upending Fashion, Steve Jobs-Style: 10 Questions With Uniqlo’s Yasunobu Kyogoku, Aug 31). Uniqlo has a very different approach from, say, Zara.

Wired: Is it true Uniqlo orders from its suppliers a full year in advance? What’s the thinking behind that?

Kyogoku: Let’s say you happen to own your own factory, and someone says, ‘In September, I’d like to order 40% of your capacity; in October, 70%; in the rest of the year, zero.’ You’d say, ‘But there’s a gentleman who just came to me and said, ‘I will book 80% of your capacity for a year and in fact, let’s do a long term partnership. Why don’t we add an extra line?’ The more you produce, the more you help me reduce the cost. We pass that to the customer. The customer buys more. We have a positive cycle where everyone wins.

Wired: With a 12-month cycle, aren’t you worried customers will go to faster-moving competitors with trendier clothes?

Kyogoku: We don’t chase trends. People mistakenly say that Uniqlo is a fast-fashion brand. We’re not. We are about clothing that’s made for everyone.

  •  Adam Davidson continues to write great stuff. He has a New York Times Magazine article about making bespoke and made-to-measure suits (What’s a $4,000 Suit Worth?, Sep 9). As the article notes, you would think that loads of people in Manhattan willing to pony up for the perfect suit. And there are but does not mean that it’s an easy way to make money. The economics of bespoke suits aren’t like those of Uniqlo:

As Rowland explained to me, even with a century-old reputation and a profoundly loyal customer base, it’s nearly impossible to get ahead. “There’s no scalability,” she explained. “Whether we’re making 50 suits or 1 — each unit costs the same.”

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A recent New Yorker article by Atul Gawande has gotten a lot of attention (Big Med, Aug 13). The article is built around an intriguing observation: The Cheesecake Factory can churn out a high variety of dishes at consistently decent quality at reasonable prices across more than a hundred locations. The question then is whether healthcare providers can learn anything from the Cheesecake Factory?

It is an thought-provoking question. The Cheesecake Factory is one of many “service factories” in a variety of industries that provide decent service at very reasonable prices. Many (e.g., Jiffy Lube) do this by winnowing down the range of services they offer but the Cheesecake Factory has a huge menu and can handle some special requests. So Gawande takes a hard look at the Cheesecake Factory to see just how they do it and finds that the kitchen manager plays a special role:

I watched the kitchen manager for a while. At every Cheesecake Factory restaurant, a kitchen manager is stationed at the counter where the food comes off the line, and he rates the food on a scale of one to ten. A nine is near-perfect. An eight requires one or two corrections before going out to a guest. A seven needs three. A six is unacceptable and has to be redone. This inspection process seemed a tricky task. No one likes to be second-guessed. The kitchen manager prodded gently, being careful to praise as often as he corrected. (“Beautiful. Beautiful!” “The pattern of this pesto glaze is just right.”) But he didn’t hesitate to correct. …

The managers had all risen through the ranks. This earned them a certain amount of respect. They in turn seemed respectful of the cooks’ skills and experience. Still, the oversight is tight, and this seemed crucial to the success of the enterprise.

The managers monitored the pace, too—scanning the screens for a station stacking up red flags, indicating orders past the target time, and deciding whether to give the cooks at the station a nudge or an extra pair of hands. They watched for waste—wasted food, wasted time, wasted effort. The formula was Business 101: Use the right amount of goods and labor to deliver what customers want and no more. Anything more is waste, and waste is lost profit.

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