Healthcare-IT Business Strategy

Sunday, July 27, 2008

Measure/Analyze what? - Financial or Clinical?

Cost goes in one direction and benefit goes in another direction.

Healthcare is not like a transaction system where you get a service for a consideration. Healthcare is unique because the cost of healthcare is borne by either the Govt in commonwealth healthcare system or the Insurance companies in private healthcare system, whereas the benefits go to the patient.

Someone can say that the benefits to the patient can be measured, but the improvement in patient safety is not really measurable. If you are going on the correct side of the road then you don’t know all the hazardous events that could have happened to you if you were on the wrong side of the road. So if you don’t know something, then you can’t measure it.

Therefore benefits of healthcare cannot be always measured in financial terms. What makes more sense is measuring the parameters in clinical terms e.g. disease trends at population levels, outcomes based on past evidence and disease progression in each patient. Utilization of resources as compared to baseline also helps.

Most business consultants’ don’t understand this simple logic in healthcare. In summary, Healthcare doesn’t have the service for a consideration financial model.

I know most people will not agree to my note above, until lots of projects fail. I will also wait for someone to educate me otherwise.

1 Comments:

  • Great point to keep me pondering. So, how would one quantify the benefits? Sure it cannot be done by a linear model, but possibly a non-linear multivariate model based on, like you say, the many different factors.

    If you know of any literature on this, please post or forward.

    By Anonymous Anonymous, At August 2, 2008 at 12:24 AM  

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