Monday, July 20, 2015

Of Costs and Benefits




I had a really excellent discussion with Alejandro Alfonso, CEO of the Hospital ABC.  I was so impressed that I now think of him as my personal bar setter, the administrator I hope I can evolve to be.

                                                                     Alejandro Alfonso

Some of the highlights of our conversation revolved around the cost/benefit equation of service delivery and the role of technology.  But it started with his assertion that the pillars of a prosperous (with all the things that word encompasses) society are education and healthcare.  The two form a feedback loop.  Education leads to self agency and economic self sufficiency, both of which have a direct impact on health status.  In the same vein, a lack of access to quality care (and Alejandro noted that insurance coverage does not by itself equal access) can negate the advantages of a quality education.

This is also why, Alejandro asserted, healthcare cannot be treated as just another market (a sentiment that I and many others share who critique those who believe that healthcare is a commodity).  If you have a tumor, Alejandro said, you can't go to the surgeon and say, "Take a third of the tumor out now, and I'll come back to you for the rest of it after I've saved up some money."   Thinking of healthcare as just another thing that consumers purchase is misguided.

Of course, providing those services is expensive, which is why Alejandro places a premium on a cost/benefit analysis based on hard data.  Just because you can provide a service doesn't necessarily mean you should. He referenced my earlier conversation about the robot assistant in Zacatecas.  That robot, he noted, costs $140,000 per year in maintenance costs. It might still be a good investment, but you have to show that the investment in this particular item produced results that could not have been obtained otherwise or that were more impactful than another area where you could have spent the money. If not, you might end up with marginal improvements at immense costs.

Alejandro went on to provide a personal example.  Years ago, a certain medical center had lobbied to purchase a very expensive diagnostic machine, the next generation of the equipment the center currently had.  As it happens, Alejandro had to have back surgery, and they told him that now he would see how good this piece of equipment was when it was used on him pre-op. When Alejandro came for his appointment, though, the machine was inoperative.  So they used the first generation machine, which had not yet been discarded. Alejandro made an inquiry from the tech, who said that the next generation machine was faster, but that was about it.

Alejandro thinks of this as a cautionary tale. If you're not careful, he said, you can find yourself in the conundrum of "el cómo sin el qué."  Which is to say, you should first know what you want to achieve before you start talking about how you're going to achieve it.

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