The Detrimental Impact of the Compartmentalization of Healthcare

Virtually all healthcare systems in the world are fighting the sustainability battle amid the increasing costs of caring for the population.   Unfortunately, due often to compartmentalization of the healthcare system, efforts by one section of the healthcare system to reduce costs actually in the end increases the overall cost of healthcare. Whether this compartmentalization takes the form of: the disconnect between hospital care and primary care; the compartmentalization in the US of under 65 years old (private insurance) and over 65 years old care (Medicare), or the compartmentalization of departments within a healthcare facility, it all leads to the same thing, higher costs, increased patient risk and worse patient outcomes.  This is unfortunately happening every day around the world. A simple example I have encountered recently in multiple regions of the world involves laboratory diagnostics. It is widely reported that approximately 70 percent of all healthcare decisions are driven by laboratory diagnostic testing. As such, diagnostics can have a tremendously positive, or negative, impact on the quality of patient outcomes and the cost of care depending on the quality of the information. However, in a highly cost conscious environment,  where for example a laboratory director is directed to cut costs, without the information or capacity to understand the more global impact, decisions are made that are bad for patient outcomes, and cost lives and money. A recent Institute of Medicine report indicates that diagnostic errors contribute to 10% of deaths in the US and 100s of billions in costs in the US each year.

Switching to less expensive reagents from dubious sources for laboratory developed tests is problematic, as is switching to cheaper, non-certified laboratories for outsourced testing. Yes, the lab director’s bottom line improves, but that result is actually in direct opposition to the real goals of lowering overall healthcare costs, improving patient outcome, and improving the sustainability of healthcare systems.

As the song says: “The toe bone’s connected to the foot bone, the foot bone’s  connected to the ankle bone, the ankle bone’s connected to the leg bone…,” this is also true for hospitals and healthcare systems, everything is connected, and the system cannot be managed effectively as if they are not. When hospitals and healthcare systems are managed as departments/compartments, decisions are made that put patients at risk, increase overall healthcare costs, decrease sustainability and increase costs to payers, be they taxpayers or insurance companies.

Leave Comment

Your email address will not be published. Required fields are marked *