Can hospitals do better by doing less? This is not to suggest that hospitals should provide less care for any individual patient. Rather the question is whether hospitals can provide better, less expensive care by limiting the scope of the services they provide. That is, instead of aiming to be a one-stop shop treating all ailments, could hospitals benefit from focusing on a narrow range of procedures?
The Globe and Mail tells a pretty compelling story that the concept of a “focused factory” to a hospital can greatly improve operations — in both the management and medical sense of the word (How the factory floor inspired a new model for health care, Nov 9). The article concentrates on Kensington Eye Institute, a Toronto non-profit provider of eye care.
Ms. Swarney was one of 27 patients that Wednesday, a slow day for one of the country’s busiest cataract clinics. It has single-handedly made a huge dent in the waiting list for cataract surgery in the Toronto area, where the wait is now 127 days for the surgery, down 60 per cent from 2005. Kensington is a leader in adapting manufacturing practices to medical care. From its unassuming perch on the sixth floor of a medical building in downtown Toronto’s eclectic Kensington Market neighbourhood, the private, not-for-profit clinic is quietly bucking the trend of health-care costs that seem to go nowhere but up.
When Kensington opened its doors in January, 2006, it received $5-million in funding to perform 6,700 cataract surgeries a year. Two years later, the clinic had increased its caseload to 7,200 patients a year with the same budget. “We did that through operating efficiencies,” says Brian McFarlane, chief executive officer of the clinic.
This is an impressive gain in performance although one has to admit that it is not totally unexpected. There are several other successful examples of focused hospitals providing superior care and service. Indeed, aficionados of operations management case studies will immediately point out that the best known example — hernia specialist Shouldice Hospital — is actually located just outside of Toronto.
What I find interesting in this example are the incentives involved. The growth of specialty hospitals in Canada has been driven in part by changes in how the provinces budget for care. As wait lists for necessary but not life-and-death procedures have grown long, provincial authorities have sought ways to increase the availability of treatment. They have thus experimented with budgeting funds for specific procedures and then got hospitals to bid for the work. If one provider could do cataract surgeries more cheaply, it won more business. Providers then had incentives to wring greater speed and cost savings from their resources and voila! waiting times shrink. (For more on this, see also this other Globe and Mail article, How a Vancouver hospital drastically cut its wait times, Nov 9.)
But what happens to the hospitals that don’t get to tap these funds? As the article presents it, they do OK.
The efficiency of “focused factories” like Kensington also help traditional hospitals by freeing up resources to focus on more complicated cases. Toronto Western Hospital, part of the University Health Network complex, transfers most of its routine, low-risk cataract patients to the clinic, said Dr. Robert Bell, the health network’s chief executive officer. The patients most at risk of developing complications, including those with underlying medical conditions, are treated at the hospital, which has more resources available.
So it seems that cherry picking by specialty hospitals does not endanger the long-term viability of standard hospitals. It is not clear that the same is true in the US, where such focused care has at times drawn fire. If a community hospital is set up to do a full range of, say, cardiac care, it is somewhat dependent on making a good return on the relatively easy cases so it can cover losses on harder cases. If a focused provider takes the easy cases, the general purpose hospital has to question whether it can still afford to be in the cardiac care business.