A common conservative theme in criticizing the Affordable Care Act is the claim that it increases health care costs.  Many of these critics think of themselves as titans of the business world or at least key supporters of the business sector.   If they have spent any time in the last 30 years applying themselves to the success of a business, then I can only conclude that they are either extremely poor managers or they are ignoring what they know about lessons learned by successful organizations over the past three decades.  Please bear with me for one paragraph while I provide some relevant info about my background.

I began learning about leadership and organization effectiveness in the early ‘80s from Ford, as they worked with Dr. W. Edwards Deming to implement their version of the Toyota Production System.   I have worked with over 100 manufacturing companies, as well as local and state governments, not-for-profit organizations, and whole communities to help them create a shared vision of an ideal future and move toward it.  I have taught people in a variety of industries to identify opportunities for improvement and apply commonly-used tools to realize the improvements.  Most recently, my work involved implementing improvements in a public health setting, where there was some resistance to using “business” tools in a not-for profit environment.  As a result, I began to look for health care organizations that were doing remarkable things in terms of improvement of quality of care, to see what I could learn from them about how to repackage my presentation.  What I learned was that everything impressive seemed to be connected to a single not-for-profit organization, the Institute for Healthcare Improvement.  Their vast online resources included everything I needed to proceed, without even modifying anything, and it was all available for free.  I began to learn more about IHI and its leader, the much embattled Don Berwick.  I can understand why some people have had difficulty with Dr. Berwick, but I can also assure you that what that organization is doing (and teaching providers to do) is exactly what needs to be done to both improve the quality of care and reduce health care costs.  There is nothing magical about it; they are just applying what Dr. Deming taught, which has been proven time and again by Toyota, Ford, and thousands of other successful organizations around the world.  And the IHI is having a considerable positive impact on the ACA approach to quality improvement and cost reduction, as the Centers for Medicare and Medicaid Services (CMS) have put the IHI resources to good use.

Here are just a few of the lessons learned by business that are now being applied in the ACA:

  • Preventing a problem is always less costly than reacting to it later.
  • If you truly improve quality, costs go down.
  • Quality doesn’t improve without involvement of all relevant stakeholders, especially customers (in this case, patients; with ACA you are likely to have more of a voice).
  • Improvement without data is nearly impossible, and standardization of repetitive processes enables data collection.
  • Preventive care significantly reduces lost time from work, which is good for business.

These key principles of the Affordable Care Act should put to rest the argument that it will increase health care costs.  That is, if the business titans who are decrying its allegedly harmful effect on business have learned anything about management and are willing to admit it.

Further reading from recent Time magazine articles:

Health Insurance Is for Everyone http://www.time.com/time/magazine/article/0,9171,2109128,00.html

The Diverted Ambulance: How ER Crowding Kills http://www.time.com/time/health/article/0,8599,2079935,00.html

Simple Design: What Health Care Can Learn from a TV Remote Control http://healthland.time.com/2012/06/01/smart-design-what-health-care-can-learn-from-a-tv-remote-control/

Post-HMO Health Care: Are ACOs the Answer? http://www.time.com/time/health/article/0,8599,2074816,00.html


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