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Progress on health costs
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By Rick Holmes
Feb. 18, 2013 5:05 p.m.

The most memorable magazine article I read this summer may have been Atul Gawande’s take on the health care industry in the New Yorker, and I think of it whenever the topic of health costs comes up.
Gawande, a Boston surgeon, compared U.S. hospitals to the Cheesecake Factory – and showed how the hospitals could learn something from the restaurant chain. Gawande goes into considerable detail on how the Cheesecake Factory sets and enforces standards of quality and uniformity, how they train and supervise employees, how they identify best practices and communicate them through the organization. The company determines the single best way to dribble pesto glaze and makes sure everyone knows how.
The Cheesecake Factory kitchen manager had a suggestion for the surgeon: This is pretty obvious. Im sure you already do it. But Id study what the best people are doing, figure out how to standardize it, and then bring it to everyone to execute.
That doesn’t happen in medicine, Gawande says, but it’s starting to happen in large hospital chains, where the each-physician-is-boss mentality is starting to chip away.
Gawande traces the hospital part of the analysis through the experience of his mother, herself a physician, who he brought to Brigham & Women’s for her second total knee replacement, an operation 600,000 Americans go through each year. It turns out there are several replacement knees on the market, several ways of installing them, and several ways of rehabbing patients who receive them. As you might guess, some ways of doing it are better than others, and can make a huge difference in cost and in how long it takes patients to recover. The problem is that American medicine is a field in which authority and communication are widely dispersed. There’s no central office telling physicians to use the therapy that gets patients back on their feet in three weeks instead of the one that requires three months of rehabilitation.
I mention Gawande’s article at this late date because I still think it’s a great read, and because in our endless debate over what government should do about health care, we sometimes forget to note the sweeping changes that have been happening in the health care industry while Washington bickered.
Those changes in the private sector, as I explain Sunday, are largely responsible for the good news on health care costs. For the fourth year in a row, health care costs have increased at a lower level than expected. From 2009 to 2011, health care spending increased at a lower pace than it has in 52 years of keeping records. Among other things, that cost restraint has prompted the CBO to reduce the projected federal deficit by $200 billion.
What’s going on within the health industry, some of it encouraged by new government policies, show that “bending the cost curve” isn’t as impossible as the “cut benefits now” crowd seems to assume. For those who care not just about the federal deficit but also what spiraling health costs do to state and local governments, private employers and family budgets, it’s good news. The U.S. still spends twice what other developed countries pay for health care, without healthier outcomes, but there are things we can do about it; indeed, we already are.

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