More on Healthcare Incentives


In China, Preventive Medicine Pits Doctor Against System –

Continuing the discussion from Evolving Excellence, today's WSJ has a well timed article. This isn't just an American problem…. seems like human nature, this conflict:

“Dr. Hu Weimin has attracted a wide following among the poor in this city by providing free advice on how to avoid high blood pressure and dispensing cheap drugs to treat the condition, one of the biggest killers in China.

His efforts have won him national recognition, and he counsels thousands of patients via the Internet. But Dr. Hu's public health message has turned him into an outcast at his hospital. Fellow physicians shun him, and administrators bar him from the wards.”

The bottom line: Dr. Hu is bad for business at the Loudi Central Hospital. By making treatment widely affordable and talking up prevention, Dr. Hu says he has cost the hospital a small fortune in lost profits.

Like hospitals all over China, Loudi Central earns the bulk of its income from sales of drugs and high-tech testing. Doctors who pull in the most revenue earn the biggest bonuses. That gives them an incentive to pad the bills, not slim them down. Academic studies show that 50% of all Chinese health-care spending is for drugs. In the U.S., the figure stands at about 10%. “Every prescription is a money-making opportunity,” says Dr. Hu.

I see why some call it the “Disease Care” system instead of Health Care. Our system and payments reward the treatment of diseases more than the prevention of illness and good health.

How is this a lean issue? It's the waste of overproduction and the waste of overprocessing. It's very hard to solve, to say the least. Imagine if you, as a manufacturing company, were paid for product you built but never sold. Oh, if you did that, you might be Chrysler. But seriously, think about why most companies move away from piece work — the incentives are skewed toward overproduction.

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Mark Graban is an internationally-recognized consultant, author, and professional speaker who has worked in healthcare, manufacturing, and startups. His latest book is Measures of Success: React Less, Lead Better, Improve More. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. He also published the anthology Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also a Senior Advisor to the technology company KaiNexus.

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