Rethinking Health Care Labor?

[carml]

From this week's NEJM

Of the $2.6 trillion spent in 2010 on health care in the United States, 56% consisted of wages for health care workers. Labor is by far the largest category of expense: health care, as it is designed and delivered today, is very labor-intensive. The 16.4 million U.S. health care employees represented 11.8% of the total employed labor force in 2010. Yet unlike virtually all other sectors of the U.S. economy, health care has experienced no gains over the past 20 years in labor productivity, defined as output per worker (in health care, the “output” is the volume of activity — including all encounters, tests, treatments, and surgeries — per unit of cost). Although it is possible that some gains in quality have been achieved that are not reflected in productivity gains, it's striking that health care is not experiencing anything near the gains achieved in other sectors. At the same time, health care labor is becoming more expensive more quickly than other types of labor. Even through the recession, when wages fell in other sectors, health care wages grew at a compounded annual rate of 3.4% from 2005 to 2010.

Have at it, guys! Note who the author is :/

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[NickNaylor]

I didn't realize medicine was analogous to making cars. I also like how he uses law as an example of how effective cutting wages is for increasing productivity. Yeah, that's what we want: a whole bunch of physicians who can't find jobs or are paid peanuts compared to the cost of training.

He makes some respectable points, but some of his argument is just terrible.

 

[carml]

In the past decade, many specialties have seen an increase in salary.

But guess what - the average RVUs/year/physician have doubled in many cases in that same decade (I know this for a fact for radiologists). So production has been increasing, I don't think you can squeeze more out of physicians without cutting reimbursements...we
ll see what Jan 1st brings.

 

[bucks2010]

I think this paragraph was most concerning:

Yet it is the final, and realistically most viable, option that provides the greatest return. If the health care sector is to achieve even the average improvement in labor productivity seen in the overall U.S. economy, we will need to redesign the care delivery model much more fundamentally to use a different quantity and mix of workers engaging in a much higher value set of activities. (Although some activities, such as feeding patients and tending to their hygiene, may be impossible to accelerate, productivity is improved when these activities are performed by lower-cost but capable labor. Approaches that encourage delegation of tasks from physicians and nurses to other workers — for instance, transferring postsurgical care from surgeons to physician assistants — provide opportunities for additional savings and increased productivity.) This solution implies eliminating myriad time-wasting, low-value activities; increasing our use of technology, data, evidence, and teams; increasing standardization to avoid rework; and relying on evidence-based personalized care to avert complications.

This argument is completely counter to the trend that is occurring nationwide, and I think that the momentum behind the increase workforce training is too strong to be reversed at this point. LPN's and paramedics are going extinct in hospitals and ED's. At my organization, LPN's and CNA's have the same qualifications and scrub color. I highly doubt you will see this trend come to an end anytime soon as hospitals chase after JCAHO magnet designation and will do what it takes to get there ... increasing workforce training is already part of that.

Also, hospitals by their nature as businesses are incentivized to minimize their costs, and for example use midlevels when appropriate. You tell me though ...... do you think once NP's fully convert to DNP's that they will ask for lower reimbursement for the care they provide? Will they gladly be the 'cheaper' option with their doctorates? I wonder.

There are of course some isolated examples where employees are too highly paid/qualified for their jobs, but overall I doubt that expanding scopes for cheaper labor is going to save any significant sum of money without having a corresponding impact on quality of care. The author cites an example of physician supervision in outpt imaging centers, but once you get past the small low-hanging fruit like this, I doubt that there is any significant sum of money to be saved without a corresponding negative impact on outcomes...